TL;DR Investment Summary
Bottom Line: Eli Lilly (LLY) stock could be undervalued by 96% at current levels, presenting one of the most compelling growth opportunities in the pharmaceutical sector.
- Analysts’ Current Rating: BUY
- Price Target: $1,476
- Key Catalyst: Medicare star ratings success + institutional investor confidence
- Main Risk: Extended medical cost inflation and execution challenges
- Valuation: 96% undervalued vs 4-year intrinsic value
What Makes Eli Lilly Stock Attractive in 2025?
Eli Lilly represents the most compelling growth story in the pharmaceutical industry today, driven by its dominant position in the revolutionary GLP-1 obesity and diabetes treatment market.
Trading at $755 with a target price of $1,476, LLY offers investors exposure to what analysts believe could be a $100 billion+ obesity treatment market by 2030.
The company’s Mounjaro and Zepbound medications have captured significant market share, with demand consistently outpacing supply.
Why LLY stock is undervalued right now:
Market underestimating the total addressable market for obesity treatments, projected revenue growth of 16.3% annually through 2030, and expanding therapeutic applications beyond diabetes into cardiovascular and sleep apnea treatments.
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Why Are Institutional Investors Bullish on LLY Stock?
Institutional confidence in Eli Lilly stems from the company’s first-mover advantage in next-generation GLP-1 therapies and robust clinical pipeline spanning multiple therapeutic areas.
Key institutional investment drivers 👇
Revolutionary obesity treatment market with minimal penetration currently, superior efficacy profile compared to existing therapies, expanding label indications creating multiple revenue streams, strong patent protection through 2030+, and demographic tailwinds from rising obesity rates globally.
What Are the Main Risks of Investing in Eli Lilly Stock?
Primary Investment Risks to Consider:
- Competition Risk: Novo Nordisk’s competing GLP-1 therapies and potential biosimilar entries could pressure market share and pricing power.
- Manufacturing Capacity Risk: Supply chain constraints limiting the ability to meet explosive demand growth could cap near-term revenue potential.
- Regulatory Risk: FDA safety concerns or label restrictions on GLP-1 therapies could impact market expansion trajectory.
- Patent Cliff Risk: Key patent expirations beyond 2030 could expose core revenue streams to generic competition.
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When Will LLY Stock Recover?
Eli Lilly is expected to benefit from manufacturing capacity expansion announcements, positive cardiovascular outcome studies for Mounjaro, FDA approvals for additional therapeutic indications, and quarterly results demonstrating sustained demand growth.
Other drivers include market penetration acceleration in obesity treatments, international market expansion approvals, pipeline advancements in Alzheimer’s and other therapeutic areas, and strategic acquisitions that expand capabilities.
Today, LLY stock is down 21% from its all-time high. It trades at a price-to-earnings multiple of 27x, which is below the 10-year historical average of 29x.
The next key driver for Eli Lilly stock will be its Q3 results.
How Did Eli Lilly Stock Perform in Q2 of 2025?
Eli Lilly’s financial metrics demonstrate an exceptional growth trajectory, with revenue growth accelerating above historical averages.
Recent performance highlights include 32% revenue growth over the past year, compared to a 15.1% five-year average, net income margins expanding to 16.7% from historical averages, and EPS growth of 105.5% demonstrating operational leverage.
The company’s forecasted performance through 2030 projects 16.3% annual revenue growth, 41.6% net income margins, and 26.4% annual EPS growth, reflecting the transformative impact of GLP-1 therapies on the business model.
Should You Buy, Hold, or Sell LLY Stock in 2025?
- Analysts’ Current Rating: BUY
- Price Target: $1,476 per share
- Expected Timeline: 52 months for full value realization
Why LLY stock is a buy right now:
Eli Lilly stock is trading at a discount to intrinsic value based on GLP-1 market potential, dominant competitive position in the revolutionary obesity treatment market, robust clinical pipeline spanning multiple high-value therapeutic areas, strong patent protection providing runway for sustained growth, and expanding international market opportunities.
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How Does LLY Compare to Pharmaceutical Peers?
Eli Lilly’s valuation reflects premium growth expectations while maintaining reasonable risk-adjusted metrics compared to traditional pharmaceutical companies.
A focus on breakthrough therapies in large, addressable markets differentiates it from peers that rely on incremental innovation or face significant patent cliffs.
LLY’s GLP-1 franchise alone represents a competitive moat that competitors are struggling to replicate.
FAQs About Eli Lilly Stock
What is Eli Lilly’s main growth driver?
LLY’s primary growth catalyst is its GLP-1 diabetes and obesity treatments, including Mounjaro and Zepbound, which address massive underserved markets.
How does LLY make money?
Eli Lilly generates revenue through the sale of prescription drugs across various therapeutic areas, including diabetes, obesity, oncology, immunology, and neuroscience.
Is LLY stock good for long-term investors?
Yes, LLY offers compelling long-term growth potential driven by demographic trends, expanding therapeutic applications, and strong competitive positioning.
What makes LLY different from other pharmaceutical companies?
LLY’s focus on breakthrough therapies in large markets, particularly its leadership in GLP-1 treatments, creates sustainable competitive advantages.
Bottom Line: Is LLY Stock Undervalued?
Yes, Eli Lilly stock looks to be significantly undervalued in 2025. Trading at $755 with a target price of $1,476, LLY offers growth-oriented investors an opportunity to capitalize on the transformative obesity treatment market while benefiting from:
For investors seeking exposure to revolutionary healthcare innovation, Eli Lilly stock represents one of the most compelling growth opportunities in today’s market.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
